What question did this study set out to answer?

The study aims to evaluate the theoretical issues surrounding cash yield and prime rate index in convertible bonds.

The APB, Yield Indices, and Predictive Ability.

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This article analyzes the theoretical issues of cash yield and prime rate index in convertible bonds, indicating flaws in their predictive power.

The study aims to evaluate the theoretical issues surrounding cash yield and prime rate index in convertible bonds.
Discussed theoretical aspects of the cash yield and prime rate index
Analyzed empirical correlations between prime rate and yield indices
Critiqued the APB's justification for using cash yield/prime rate index
Identified significant theoretical flaws in the APB's chosen index
Noted insignificance in the difference between cash yields and yields to maturity
Highlighted a bias in comparing cash yields on risky securities with riskless rates

Hofstedt et al. (1971) studied this question.

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This article analyzes the theoretical issues of cash yield and prime rate index in convertible bonds, indicating flaws in their predictive power.